In 2012 we reported on a decision affirming the conclusion that school districts lack standing to “question the assessments or the method of arriving at the assessed valuation.” Xerox v. Town of Webster, 131 Misc. 2d 817 (Monroe Cty. Sup. Ct. 1986). However, a recent Appellate Division decision suggests otherwise.

In Matter of Glens Falls City School District v. City of Glens Falls, (3d Dept. 2016), the school district challenged the valuation and allocation of two tax parcels. The Third Department affirmed the trial courts conclusion that an Article 78 proceeding was the improper forum for challenging the tax assessment. The court explained that a challenge alleging “illegality, overvaluation or inequality with respect to assessments” should be brought under Article 7 of the Real Property Tax Law. Challenges to the “taxing authority’s jurisdiction, the method utilized in the assessment or the legality of the tax itself,” may be brought in an Article 78 proceeding.

Based on Xerox, one would expect Matter of Glens Falls to be dismissed for lack of standing. The concurring opinion in Matter of Glens Falls was is favor of dismissing on that basis. However, the majority of the Third Department disagreed. The majority decided that school district’s Article 78 action was improper because it challenged only “valuation determinations”, rather than “a particular methodological approach.”  Accordingly, the majority opinion leaves the door open for a school district to establish standing in an Article 78 action if it challenges “a particular methodological approach”.  We will continue to monitor to see if this specific type of challenge is brought in the future.

(Co-authored by Georgia Crinnin, Esq.)